I must apologize: In yesterday’s blog I explained why the record holiday shopping season has opened up a tremendous opportunity in retail stocks. But I left you without any actionable advice as to which retail stocks you should be buying for the holidays. So today I’m going to make good on my promise and introduce you to one of my favorite retail stocks today.
But first, let’s take a step back from the retail world and look at some numbers. In particular, let’s zero in on the latest housing data. Don’t worry. You’ll see why this all matters in a moment…
In October, October existing home sales rose 3.9% to an annual rate of 5.36 million. Meanwhile, new home sales also reached an annual rate of 495,000, beating September’s numbers by 11%. There’s no doubt that we’re in the midst of a solid housing recovery. That’s why I’ve been so excited about this retailer; it is at the crux of the consumer rebound and the housing recovery.
The Home Depot Inc. (HD) is the world’s largest home improvement retailer. From air conditioning units to gardening supplies to home appliances to electrical fixtures, this store is a one-stop-shop for all your home improvement needs. And with some help from the ongoing housing recovery, Home Depot is an A-rated stock in my Portfolio Grader tool.
In the topsy-turvy market we’ve seen recently, though, no company’s stock can gain an impressive 28% year-to-date simply on the promise of an industry-wide recovery. Home Depot has revealed its own solid fundamentals over the past four quarters as well. In fact, it kicked off 2015 with a better than 12% earnings surprise in January, and it’s ending this year with a 3% earnings surprise.
Take into account quarterly revenue growth of more than 6% and quarterly earnings growth of better than 12%, and you can start to see why I like this stock so much. And the best is yet to come; Home Depot is expected to exceed 15% bottom-line growth for the next two years.
All the while, Home Depot knows how to reward its shareholders. The company is in the middle of buying back $18 billion of its stock back, and it pays a dividend of $2.36 per share each year. At current prices, HD has a solid 1.75% dividend yield.
If you’re looking to strengthen your portfolio with a conservative growth play, Home Depot would be an excellent choice.
If you want to know all the secrets behind this and the rest of my favorite stocks, I urge you to join me here at Blue Chip Growth.
Forthose of you who aren’t familiar, Blue Chip Growth is where I share all my favorite investing insights with individual investors just like you, including exclusive buy below prices and model portfolio allocations. Of course, you’re always welcome to continue taking advantage of my free market insights right here at Navellier Growth as well.